Case Law Details
In re Tamilnadu Generation and Distribution Corporation Limited (GST AAAR Tamilnadu)
Notification 12 notifies the list of services that are exempt from GST and has been issued in pursuance of the proviso in Section 11. Therefore, all entries in this notification deal only with services and not with goods. Entry No.25 under heading 9969 exempts transmission or distribution of electricity by an electricity transmission or distribution utility. Therefore, the essential requirements are the following:
(i) Supplier must be either transmission utility or distribution utility.
(ii) The supplier must supply either transmission service or service of distribution of electricity. It also follows that there must be a recipient to receive the services. The supply transaction must be between the utility and a recipient of either of these two services. It may be possible that a transmission utility may provide a distribution service to a recipient or a distribution utility may provide a transmission service to another recipient. A transmission service essentially requires conveyance of electricity by means of transmission lines. For this, Section 2 (74) of the Electricity Act may be referred as has been proposed by the appellant in his argument. Therefore, for making a supply of service to a recipient, the supplier must convey electricity for the recipient who must either be a generating company or a distribution company. In the present instance, TANGEDCO is not conveying electricity for TANTRANSCO. Clearly, TANGEDCO is not providing a transmission service to TANTRANSCO.
Section 2(17) of the Electricity Act defines distribution licensee as a licensee authorized to operate and maintain a distribution system for supply of electricity to consumers in his area of supply. Therefore, the output supply for distribution licensee is electricity to consumers in his area of supply which means that a distribution service from a distribution licensee can be received only by consumers of electricity in the area of supply of the distribution licensing. Operation and maintenance of a distribution system is only a process for delivery of the supply of electricity.
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